James Koenig co-chairs Troutman Pepper’s privacy and cybersecurity practice. For the past ten years, he has represented global clients in the financial services, energy, retail, pharmaceutical/health care, cable, telecommunications, car rental, airline, social media, technology, and manufacturing industries, including 35% of Fortune 100-listed companies.
High-stakes artificial intelligence (AI) is becoming even higher risk in the European Union, where AI regulation efforts are underway that could cost your company up to 6% of its total worldwide revenues—more than the potential penalties for privacy violations under the EU’s General Data Protection Regulation (GDPR). On April 21, 2021, the European Commission proposed rules for regulating AI (the “AI Act” or “Act”), to which the European Parliament recently released proposed amendments on April 20, 2022. The Act may undergo a series of additional amendments, but a final text is nearing completion and European countries are starting to act in anticipation of the regulation. Companies should plan for the comprehensive act to become law and begin implementing best practices now to ensure a competitive advantage. Below is an overview of the AI Act’s key provisions that takes into account the Parliament’s recent changes.